Are the golden years of retirement a good time to buy a house? The answer depends on your own personal circumstances.
When it comes to real estate, Orlando is always a great place to buy; Florida is eternally popular with retirees. There are some great bargains on the Orlando real estate listings right now so it may be the best time to buy a new primary or secondary residence. But enter the transaction with your eyes wide open.
Here a few considerations to take into account before putting an offer on that perfect central Florida house.
Budgeting a Limited Income
Your retirement years are not the time to be house poor. Make sure your monthly income is enough to afford a new mortgage payment in addition to entertainment, travel, and anything else you have saved these years to do. Consider your heirs, too. Do you want to leave them with a mortgage that might be upside down after you pass away?
Location, Location, Location
Many retirees choose Orlando, Lake Mary, or any of other popular cities in Florida as the place they want to spend their waning years. The truth is, central Florida real estate is always a hot buy. You are better off buying a home in one of the top-rated Orlando neighborhoods than you would be purchasing real estate elsewhere because it will always have value.
Taxes
Of course you will be able to deduct the mortgage loan interest and property taxes on your Florida home, whether it is your primary residence or a vacation property. But if you decide to sell a second home, the profit on the sale will be considered a capital gain and taxed accordingly. Regarding the sale of a primary home, $500,000 in profit is allowed by the IRS tax-free.
If you currently have a second home you wish to sell, it may interest you to note that if you live it in for two consecutive years out of five the high capital gains tax will not apply.